Japan could be emerging from recession
Japan is set to release GDP figures tomorrow with analysts predicting growth of 1% during the April to June period.
After four consecutive quarter-on-quarter contractions, positive growth would mean the recession is over in Japan.
Last week, figures revealed that Hong Kong had emerged from recession after the economy grew 3.3% in the second quarter.
Furthermore, it followed the news that Singapore, France and Germany had also emerged from recession.
The Japanese economy, which is the world’s second largest, is heavily dependent on exports and has been hit by a slump in demand for its products overseas, particularly cars and electrical goods.
Meanwhile, the Bank of England’s Andrew Sentance has told the Sunday Times that growth overseas could bode well for Japan’s recovery.
Mr Sentance, who is part of the bank’s rate-setting monetary policy committee, said “The prospects for global recovery depend on whether Asia can become a true engine of global growth, not simply by meeting demand originating in America and Europe but propelled by consumer spending and investment in this key region.”
“Most advanced economies are showing signs of a ‘bottoming out’ and the downturn has eased significantly in the United States and euro zone“, added Mr Sentence.
Last week, Japan’s central bank again kept its key interest rate at 0.1% and adopted a cautious outlook for the economy.
The bank said conditions had stopped deteriorating but warned that unemployment is expected to rise and consumer spending will remain weak.